Currently, homeowners in the United States alone spend over 49 billion dollars annually on homeowner insurance premiums. Small businesses also spend at least this amount annually protecting structures and their contents through building insurance. Most households and small businesses depend on homeowner's and building insurance to cover the cost of replacing or repairing their primary residence or place of business in the event of damage due to natural disasters such as: fire; earthquake; flooding; wind/storm; land/mudslide; and falling trees, or man-made disasters, such as: falling parts of neighboring structures; vehicles; failed or faulty service systems and appliances; etc.
Since, for most households and small businesses, the homeowner's/building insurance covers the primary residence or place of business, the long term customer focus regarding homeowner's/building insurance coverage is on the replacement/repair of the actual structure comprising the home or business building. However, in the event of a major disaster, the cost of replacing the actual home or business structure is only part of the loss incurred. Often forgotten over time is the rising replacement cost of personal/business property housed in the structure, and often lost with the structure, such as appliances, televisions and other video devices, stereo systems and other audio devices, office equipment, computing devices, and various other “durable goods” as well as furniture and collections such as art, firearms, coins, antiques, etc. Not only is the cost of replacing this personal/business property very significant, but it is these items that make any replacement, or repaired, dwelling or building a livable and functioning home or a location capable of conducting business.
Most homeowner's/building insurance policies ask for an inventory of personal/business property kept in the insured structure when the policy is written, or they provide a range, or cap, of personal/business property that is covered by the structure policy. For instance, a typical homeowner's policy will provide for replacement value of the home structure at a base premium plus, for additional premiums, various ranges of personal property value can also be covered such as: zero to five thousand dollars; five to ten thousand dollars; ten to twenty thousand dollars; and so on. In this way, the homeowner's/building insurance policies can be “customized” and made flexible enough to meet the needs of numerous different insured parties, and/or can evolve with the needs of any given insured party. However, if the total value of personal/business property housed in the insured structure changes, it is typically left to customer, i.e., the insured party, to adjust the insurance coverage and/or premium to reflect this change.
Unfortunately, as noted above, the long-term mental focus of the typical insured party regarding homeowner's/building insurance coverage is on the replacement/repair of the actual structure. Consequently, as the total value of personal/business property contained within the insured structure changes, i.e., a household grows in size or acquires/disposes of more personal property, or a business grows and takes on more employees and/or equipment, the insured party often fails to adjust the personal/business property insurance coverage to reflect, and cover, the change. Consequently, a dangerous gap often develops between insurance coverage and actual value of personal property that will need to be replaced in the event of a disaster or other emergency. This gap is often only brought to the attention of the insured party when it is too late, i.e., when disaster has struck, and they are in the worst possible position to fill the gap.
The situation described above is, obviously, not ideal for the insured parties who, after a disaster, are potentially left without sufficient coverage to either establish a new/repaired home or get back to doing business. However, the situation described above falls equally short of ideal for the insurance companies, who typically want to provide additional coverage to the insured parties as the need arises.